Guide to Global Payroll Management - 2020 - D-163

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Appendix D--Federal Forms and Instructions

extension on Form 7004 using the original form type assigned to
the entity. See the Instructions for Form 1120-H.

Penalty for late payment of tax. Generally, a penalty of 1/2 of
1% of any tax not paid by the due date is charged for each
month or part of a month that the tax remains unpaid. The
penalty cannot exceed 25% of the amount due. The penalty will
not be charged if you can show reasonable cause for not paying
on time.
If a corporation is granted an extension of time to file a
corporation income tax return, it will not be charged a late
payment penalty if the tax shown on Part II, line 6 (or the amount
of tax paid by the regular due date of the return), is at least 90%
of the tax shown on the total tax line of your return, and the
balance due shown on the return is paid by the extended due
date.

Note. The trustee of a trust required to file Form 1041-A must
use Form 8868, instead of Form 7004, to request an extension
of time to file.

Part II - All Filers Must Complete
This Part

Line 2

Check the box on line 2 if you are requesting an extension of
time to file for a foreign corporation that does not have an office
or place of business in the United States. The entity must file
Form 7004 by the due date of the return (the 15th day of the 6th
month following the close of the tax year) to request an
extension.

Interest. Interest is charged on any tax not paid by the regular
due date of the return from the due date until the tax is paid. It
will be charged even if you have been granted an extension or
have shown reasonable cause for not paying on time.

Forms 1065 and 1066. A penalty may be assessed against the
partnership or REMIC if it is required to file a return, but fails to
file it on time, including extensions, or files a return that fails to
show all the information required. The penalty can be waived if
the entity can show reasonable cause for not filing on time. See
the Instructions for Forms 1065 and 1066 for more information.

Line 3

Only the common parent or agent of a consolidated group can
request an extension of time to file the group's consolidated
return.

Attach a list of all members of the consolidated group
showing the name, address, and EIN for each member of the
group. If you file a paper return, you must provide this
information using the following format: 8.5 x 11, 20 lb. white
paper; 12 point font in Courier, Arial, or Times New Roman;
black ink; one-sided printing; and at least a one-half inch margin.
Information is to be presented in a two column format, with the
left column containing affiliates' names and addresses, and the
right column containing the EIN with one-half inch between the
columns. There should be two blank lines between listed
affiliates.

Reasonable cause. If you receive a notice about a penalty
after you file your return, send the IRS an explanation and we will
determine if you meet reasonable-cause criteria. Do not attach
an explanation when you file your return.

Specific Instructions

Name and identifying number. If your name has changed
since you filed your tax return for the previous year, enter on
Form 7004 your name as you entered it on the previous year's
income tax return. If the name entered on Form 7004 does not
match the IRS database and/or the identifying number is
incorrect, you will not have a valid extension. Enter your
applicable employer identification number (EIN) or social
security number (SSN).

Generally, all members of a consolidated group must use the
same taxable year as the common parent corporation. If,
however, a particular member of a consolidated group is
required to file a separate income tax return for a short period
and seeks an extension of time to file the return, that member
must file a separate Form 7004 for that period. See Regulations
section 1.1502-76 for details.

Address. Include the suite, room, or other unit number after the
street address. If the post office does not deliver mail to the
street address and the entity has a P.O. box, show the box
number instead of the street address.
If the entity's address is outside the United States or its
possessions or territories, enter in the space for "city, town,
state, and ZIP code," the information in the following order: city,
province or state, and country. Follow the country's practice for
entering the postal code. Do not abbreviate the country name.
If the entity's mailing address has changed since you filed
your last return, use Form 8822, Change of Address, or Form
8822-B, Change of Address or Responsible Party-Business, to
notify the IRS of the change. A new address shown on Form
7004 will not update your record.

!

CAUTION

Any member of either a controlled group of corporations
or an affiliated group of corporations not joining in a
consolidated return must file a separate Form 7004.

Note. Failure to list members of the affiliated group on an
attachment may result in the group's inability to elect to file a
consolidated return. However, see Regulations sections
301.9100-1 through 301.9100-3 for information about extensions
of time for making elections.

Line 4

Certain foreign and domestic corporations and certain
partnerships are entitled to an automatic extension of time to file
and pay under Regulations section 1.6081-5. These entities do
not need to file Form 7004 to take this automatic extension and
must file (or request an additional extension of time to file) and
pay any balance due by the 15th day of the 6th month following
the close of the tax year. This includes:
* Partnerships that keep their books and records outside the
United States and Puerto Rico,
* A foreign corporation that maintains an office or place of
business in the United States,
* A domestic corporation that transacts its business and keeps
its books and records of account outside the United States and
Puerto Rico, or
* A domestic corporation whose principal income is from
sources within the possessions of the United States.

Part I - Automatic Extension for
Certain Business Income Tax,
Information, and Other Returns
Line 1

Enter the appropriate form code in the boxes on line 1 to indicate
the type of return for which you are requesting an extension. See
Maximum extension period, earlier.
If an association is electing to file Form 1120-H, U.S. Income
Tax Return for Homeowners Association, it should file for an
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Guide to Global Payroll Management - 2020

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